South African consumers are entering the festive season with some welcome relief as food inflation continues to ease. Recent data from Statistics South Africa shows decrease in food and non-alcoholic beverages inflation, from 0.9% in September to 0.7% in October 2024, providing consumers with some respite as the holiday season approaches.

Annual consumer price inflation was down from 3,8% in September to 2,8% in October 2024. The main contributors to the sharp drop in October were:

• Housing and utilities (4,8% and contributing 1,1 percentage points);
• Miscellaneous goods and services (6,8% and contributing 1,0 percentage point);
• Food and non-alcoholic beverages (3,6% and contributing 0,7 of a percentage point); and
• Alcoholic beverages and tobacco (4,5% and contributing 0,3 of a percentage point)

 

Transport was the only negative contributor (-5,3% and contributing -0,8 of a percentage point):

While poultry prices increased by 3.0% for Individually Quick Frozen (IQF) pieces, beef and sheep meat prices dropped by 2.4% and 1.5%, respectively from September 2024, according to the October Food Inflation Brief released last week.

 

Average Poultry Prices (2021-2023) and Price Forecasts (2024-2027)

 

More optimism is on the horizon as the government has announced plans to expand VAT-free items, with new inclusions expected by early 2025. This policy is anticipated to provide much-needed relief for financially constrained households, easing the burden of food costs in 2025.

Despite this positive trend, lower-income households remain under pressure, particularly due to the rising cost of staple proteins like chicken—a festive favourite.

A November release by the National Agricultural Marketing Council (NAMC) found that frozen chicken portions increased by 0.9% compared to the same period last year.

NAMC added that the same has been seen in Eggs, which rose by a staggering 19.6% annually, to R55.00 for 1.5 dozen, while instant coffee (250g) and Ceylon tea (250g) climbed 19.7% and 17.5%, respectively.

Chicken remains a favourite on Christmas menus, which might force many South African families to review their festive expenditure as most of the food items consumed daily have also increased in price.

According to the Bureau for Food and Agricultural Policy (BFAP)’s latest report, meat prices in South Africa have remained stable, with poultry and pork prices rising, while beef and sheep meat prices have declined. The report noted a 2.4% decrease in beef prices and a 1.5% drop in sheep meat prices but expects festive demand to push prices higher in the coming months.

 

Household Affordability Index

According to the latest Household Affordability Index, the average household food basket has increased by 0.9% year-on-year, costing R5,361.04 as at November 2024. Other increases from November 2023 include stock cubes, at 6%, chicken feet at 6%, chicken livers at 5%, bananas at 10%, and oranges at 13%. Other staples like maize meal, onions, and brown bread increased by at least 2% each.

The Programme Coordinator for the Household Affordability Index, Mervyn Abrahams said while the vegetable price increases have eased, the general trend of the household food basket remains high. “With the household food basket averaging R5 361.04, many households in South Africa remain unable to afford such a food basket”.

With Christmas shopping and back-to-school costs looming in January, families will be forced to dig deep into their wallets while their food baskets get smaller, Abrahams explained.

The current National Minimum Wage is R4,633.44, which further constrains available money for families to manage the increasing costs, with the average food expenditure for a family of four has risen to R3,791.26 as of November 2023. Abrahams added that this makes it increasingly challenging to maintain traditional festive meals.

In light of the increasing costs, many families have started readjusting their meal plans, usually replacing the more costly protein sources like chicken with fillers such as chicken livers and eggs, which are equally on the rise, by 5% and 2% respectively, since last November, Abrahams said.

As prices increase, retailers have noted that consumers purchase more in bulk and do more price comparisons. Abraham added that this is because there is a growing focus on high-demand items, such as chicken, with many retailers expected to offer holiday discounts.

However, these discounts require competitive shopping strategies and may only temporarily relieve struggling households.

 

Policy Reforms

The overall increase in chicken prices, together with other staple foods, points toward broader issues of food affordability and economic inequality in the nation. While community initiatives may address some of these issues, advocates say more systemic reforms are needed to attack the root causes.

There are calls for increasing the Child Support Grant, which is currently R530.  This is way below the R966.46 required for a basic nutritious diet for a child, according to South African Social Security Agency.

Wage adjustments to reflect the increase in the cost of living are also being pressed to supplement household purchasing power. With 2025 looming ahead for South Africa, food security and wage modifications are being pressed to policymakers as ways to try to bridge the widening gap between income and essential expenditures.

 

Conclusion

Government measures like expanded VAT exemptions may help, but broader policy reforms are needed to address food affordability and economic inequality. With living costs outpacing wage growth, ensuring food security and improving financial well-being will require urgent attention from policymakers. ChickenFacts remain on the ground, monitoring prices and consumer interests.

 

For more on poultry market forecasts, read our recent article: Outlook for Chicken Demand and Supply in South Africa